Can we call this neo-feudalism yet? According to a new report by the Institute for Policy Studies (IPS) America’s 20 wealthiest people now own more wealth than the bottom half of the American population combined. IPS calculates the top 20 in the Forbes 400 richest list own more wealth than 152 million people in 57 million households.
Beyond the top 20 the numbers get even worse. The IPS report estimates that the entire Forbes 400 Richest Americans list own more wealth than the bottom 61% of the country — 194 million people — combined. IPS can only estimate due to widespread use among the rich of offshore tax havens, which means inequality could actually be more severe.
The Forbes 400 richest Americans are not just wealthy relative to other Americans, but to people all over the world. As IPS notes, the total amount of wealth estimated to be held by the Forbes 400 is $2.34 trillion, an amount that surpasses the GDP of India with a population that exceeds 1 billion people.
IPS claims wealth concentration has been a result of public policy as much as so-called market forces:
Many members of the Forbes 400 have amassed wealth in their lifetime through successful companies and innovation. But all of the Forbes 400 have also benefited enormously from a system of tax, trade, and regulatory rules tipped in favor of wealth holders at the expense of wage earners.
Tax policies, for instance, routinely favor capital income over wage income, and these policies disproportionately benefit the Forbes 400, especially those working in finance.
Well before Washington bailed out Wall Street, it was giving banksters special privileges in the tax and regulatory code. These advantages helped further finacialize the US economy. Wall Street paid back the politicians with large campaign contributions.
To counter increasing wealth concentration and inequality, IPS recommends a new round of progressive policies. The first part would be restoring and reinforcing the social safety net — raising the minimum wage, universal healthcare, and paid sick leave — policies that would do a lot to stop people from becoming extremely poor.
IPS also recommends policies that will “level the playing field.” Policies preventing the wealthy from using offshore tax havens and other tools to avoid US taxes and regulations, as well as campaign finance reform to limit the power of money in elections. This prevents the rich from abusing the system and perverting it for their own ends.
And, ultimately, IPS recommends policies that will undo much of the present wealth concentration including higher taxation on the rich and antitrust activities to breakup firms dominating markets and grossly enriching executives.
The problem, of course, is that in order to make those policies happen progressives would have to overcome the power and influence of the Forbes 400 and friends who have captured the government. Power and wealth feed on each other, especially in a post-Citizens United America, and the more the inequality grows the more the 1% can dominate policymaking institutions.